Question

If consumers in Canada increase their demand for
products that are manufactured in India, which of
the following will occur?
1) India's financial capital inflow will increase.
2) Canada's financial capital inflow will increase.
(Macro Economics)

Answer 1

When Canada increase their demand for products manufactured products in India what will occur is; India's financial capital inflow will increase.

What is the impact of importation on the ecomomy?

Usually the ideal for a country to grow economically is to have a healthy GDP which means they will be depending lesser on imports as they produce most of what they need locally.

Now, If consumers in Canada increase their demand for products that are manufactured in India, it means their economy will become weaker as they will be using their currency outisde instead of within the country to grow it and so it means that Inidia's financial capital inflow will increase while Canada's capital inflow willl decrease.

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